9911796707
TMI Blog2007 (12) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... . The judgment of the court was delivered by RAKESH KUMAR JAIN J. The point for consideration in this petition is as to whether a director of a company can be made personally liable for the amount due from the company for the arrears of State and Central sales tax? The petitioner is the director of M/s. Agni Wire Industries Pvt. Ltd. Respondent No. 2 served a show-cause notice dated December 22, 2005 (annexure P-1) to the petitioner to recover an amount of Rs. 22,25,036 on account of Central sales tax arrears due from the company. A similar notice was earlier served upon both the petitioner and his son, who was also on the Board of Directors, which is attached as annexure P-3. The petitioner has challenged the notices, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of or after its liquidation, cannot be recovered, then, every person who was a director of the private company at any time during the period for which the tax is due shall be jointly and severally be liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company. The petitioner filed replication to the written statement. It is categorically mentioned that the company is still not wound up or formally liquidated. The respondents however, did not controvert this fact. Counsel for the parties have been heard at length. Learned counsel for the petitioner vehemently argued that the point in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997] 10 PHT 495 and Mukesh Gupta [1996] 8 PHT 326 has been controverted by citing any authority to the contrary. Therefore, we are in agreement with the contentions raised by the learned counsel for the petitioner and are of the view that the notices, annexures P-1 and P-3, are not only illegal but also arbitrary and whimsical as the same have been issued on December 22, 2005 in spite of the fact that the law has been settled by this court in the cases of Suneet Khurana [1997] 10 PHT 495 on September 3, 1997 and Mukesh Gupta [1996] 8 PHT 326 on July 18, 1996. The writ petition is thus, allowed and consequently, notices, annexures P-1 and P-3, are hereby quashed. In the peculiar facts and circumstances of this case, since the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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